Direct Marketing

Direct Marketing

“Direct marketing is an interactive system of marketing which uses one or more advertising media to effect a measurable response and/or transaction at any location.”
A number of factors are promoting the attractiveness of direct marketing. The main factors are:
Availability of consumer credit cards,
Availability of professional agencies,
Competitive Pressures, Rising Media Costs, and Market Fragmentation,
Increasing family incomes, including dual-income families,
Technological advances.
For successful implementation of direct marketing, marketers must establish objectives, specify target market, choice of strategies, and set evaluation criteria.

Direct Marketing

Direct Marketing Objectives

Objectives of direct marketing usually focus on seeking a direct response in terms of behavior. Order response rate varies across product categories and prices but in most cases, usually a two per cent order placement is viewed as good. Some organizations use direct marketing to inform and educate customers about product/service in anticipation that it may precipitate future actions, reminding about offers, image building, maintain customer satisfaction, strengthen the relationship, and reassure customers about purchases.

Market Segmentation

Market Segmentation and targeting the right customers are critical to the success of the promotional program. Customers can be grouped on the basis of age, sex, income, education, lifestyle, and stage in family life cycle etc.
Direct marketers use a database. It is much more than just names and addresses and is used to identify and profile the company’s best customers and effectively target the customer segments.
Ongoing database updating helps companies identify trends and buying patterns. This information can be used by the companies to strengthen a relationship with its customers by satisfying their needs and wants more effectively.
The database should provide the answers to the following questions:
Where do they live?
How did they make contact first time?
What have they purchased?
How often have they purchased?
What is the monetary value of their purchases?
How do they order or purchase, through the Internet, mail, phone, or in person?
What is known about them and their families, occupation, education, children, interests, attitudes, and payment histories etc.?
In the case of B2B, who are the influencers, users, deciders, and purchasers?
Location of corporate office and branch offices.
Well-managed companies usually develop and maintain their own database. Many independent research suppliers sell this kind of information. The database helps in developing a mailing list that minimizes waste coverage as much as possible. A good database is crucial to the effectiveness of direct marketing. If a direct marketing company buys the database from outside sources, it is worthwhile to pay a little more for a good database that has been well researched and segregated than to pay for a list of names and addresses.

Advantages of Direct Marketing

Direct marketing offers the advantage of reaching a large number of well-defined target customers and almost eliminates waste coverage.
Good quality databases are available from independent suppliers and the marketer can segment customer groups with considerable precision.
A direct marketer can personalize the message.
Direct marketing can deliver almost perfect offers to customers.
A marketer can build desired frequency level based on media.
Direct marketing offers creative flexibility in different media.
A direct marketer can quickly develop a list of specific profiles for direct mail.
Direct marketing is more effective in building the customer relationship.
It is very cost effective considering the sale generated per contact.
The results can be measured most accurately.

Direct Marketing Offer and Media

According to Edward L. Nash, there are five important decision areas: product, offer, medium, distribution method, and creative strategy. The marketer has to decide on each of these issues and develop the appropriate message to be conveyed. Direct marketers use all the available major media such as direct mail, telemarketing, direct response broadcasting, print, the Internet, E-mail, and others.

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